Fundamental analytics

The price of Brent crude could gain a foothold above the $70 level

Brent

NG

Statistics published in the US indicates a substantial decline in real consumption level of natural gas due to completion of the heating season. According to published on Thursday report of the US Department of Energy gas inventories rose by 23B for the first time since mid-November 2018. It’s a negative factor for the market, that virtually eliminates a probability of the gas quotes surge. Now, after solid fluctuations of the price in winter, market switches to the phase of flat, that may last till beginning of the next heating season.

On the chart of the asset signals, that point out a development of sideways movement also prevail.  Sellers didn’t manage to keep the price within bearish channel and now we can expect forming of sideways price movement in the range between the 2.570-2.750 levels.

Our recommendations: Shorts from 2.750.

Brent

On Monday the price of Brent crude could gain a foothold above the $70 level and continue to climb higher. At the same time, during the day market was under influence of factors, that produced mixed effect.

Negative impact was made by situation on stock markets, where the main indices were traded in the red, reflecting decreased interest of investors in risky assets with the crude among them.

In its turn purchases of this asset were stimulated by notes of escalation of military conflict in Libya and claims of the White House on designating of Iran’s Islamic Revolutionary Guard Corps (IRGC) as foreign terrorist organization. Further escalation of these conflicts can lead to reduction of crude supply to global market supporting further growth of the prices for energy carriers.

The day before Saudi Arabia Energy Minister said, that OPEC countries are intended to continue crude output cuts in order to balance the oil market, since current oil inventories surpass average level for five years by 70-80 million barrels.

As we see, despite the restraining influence of certain factors, bullish signals prevail on the market indicating further development of upward movement on oil market.

On the chart first of all we note settling of the asset above the 70.00 level. It’s a solid signal of bullish movement continuation with new target at the 72.00 level. Correspondingly level 70.00 is transforming from resistance into support for the price. If we consider local situation, then we should consider intraday long-trades for this asset a bit lower than intraday lows established yesterday, at 70.40.

Our recommendations: Longs from 70.40.


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